Dealer Markups: Did You Know The Dealer Charged You More Than He Had To?

Dealers “markup” financing that they arrange for your vehicle purchase. The Dealer and the Finance Company then share the additional profits! Recently, Ally Financial agreed to pay a huge settlement for giving dealers this ability, and thereby allowing them to discriminate against minorities by charging them more! This violates the Equal Credit Opportunities Act. Automotive News reports that a number of manufacturers’ “captive” finance companies have settled on a 2.5% markup limit agreement. California now has a law that sets a 2.5% markup ceiling for most car loans. So it seems that 2.5% is now the magic number in the industry. Over the life of the loan that can mean hundreds and thousands of dollars.!